Transparency Rising, the trade association led by transparent, pass-through pharmacy benefit managers, today welcomed the U.S. Department of Labor’s final rule on pharmacy benefit manager fee disclosures, released at an event with CMS Administrator Dr. Mehmet Oz, Labor Secretary Keith Sonderling, and industry leaders.
The rule gives self-insured employers greater visibility into what their pharmacy benefit manager and its affiliates are paid, with detailed reporting and the right to audit it.
“Congress said 100 percent of rebates belong to the employer. This rule honors that and bolsters the landmark PBM reforms Congress passed earlier this year. The value of sunshine isn’t just the light, it’s the heat,” said Joseph Shields, CEO of Transparency Rising. “Employers need more than promises of bigger rebates or deeper discounts. They need a clear line of sight to net effective cost, what each drug really costs after rebates, discounts, and fees. Once fiduciaries see it, they can’t look the other way.”
Enforcement is what gives the rule teeth. Because disclosure is tied to ERISA’s prohibited-transaction rules, the Employee Benefits Security Administration can enforce it, and plan fiduciaries must report PBMs that fail to provide the information. Forty-five state attorneys general of both parties supported the rule and offered to help enforce PBM disclosure.
“Disclosure only matters if it’s enforced,” Shields said. “We stand ready to work with the Employee Benefits Security Administration, state attorneys general, and other federal and state offices to make sure employers get the information this rule promises and to address distortion in the market.”
The rule reflects practices transparent PBMs already follow, and Transparency Rising told the Labor Department and the White House budget office that the compliance burden is manageable.
“We already show our clients every dollar, drug by drug, because that is what a pass-through model does,” said Greg Baker, CEO of AffirmedRx, a transparent PBM and Transparency Rising member. “This rule adds no burden for companies like ours. It removes the excuse for everyone else. Employers will finally be able to compare PBMs on what drugs actually cost and what they can expect to pay next year. Americans deserve to understand what is driving their pharmacy costs, and this is a real step toward that. We are proving right now that lower, more predictable costs and better health outcomes can go together.”
“Americans deserve to understand what is driving their healthcare costs, and they deserve to have access to their data, as well as a partner that is truly positioned on their side of the table,” said Amy Waldstrom, president of Vivid Clear Rx, the transparent PBM created by Hy-Vee, Iowa’s largest private employer, which offers health benefits to 70,000 employees and their families. “These rule changes are a positive step. It is not hard or complex; it simply comes down to doing the right thing. Across the industry, pharmacy costs are rising about 12 percent a year. At Vivid Clear Rx, they’re down 1 percent.”
The rule arrives as employers face some of the steepest plan cost increases in more than two decades. Workers now pay $7,471 a year toward health care coverage for their families, up 9 percent from 2025, out of a total premium of $28,303, according to KFF.
“Greater disclosure matters: it empowers employers, helps them ask the right questions and get the right answers, leading to better purchasing decisions,” added Shields. “And this means better outcomes for employees and their families, with access to the quality prescription drugs they need at lower costs.”
What the rule does
- Enforcement with teeth: disclosure is tied to ERISA prohibited-transaction relief, arrangements without it can become prohibited transactions, and DOL/EBSA can enforce through its prohibited-transaction authority.
- Follow the money: reporting of PBM compensation and revenue streams, including rebates, spread pricing, fees, markups, manufacturer payments, formulary-placement incentives, and affiliate earnings.
- Barriers and conflicts: disclosure of termination fees and exit penalties, PBM fiduciary status, conflicts of interest, and omitted therapeutic alternatives.
- Ongoing checks: semiannual reporting of actual versus projected compensation, and annual employer audit rights.
- Fiduciary duties: fiduciaries must evaluate PBM compensation, not just receive disclosures, and report noncompliant PBMs; those who keep arrangements with undisclosed or unreasonable compensation could face personal liability.
- Net effective cost: the preamble focuses employers on what drugs cost after rebates, fees, and other compensation, not list-price discounts alone.
The Consolidated Appropriations Act of 2026 requires 100 percent rebate pass-through in ERISA plans’ PBM contracts starting in 2028. The rule lets employers verify it sooner, down to revenue relabeled as fees or held at an affiliate.
That matters because the largest PBMs are telling employers a different story. Their FTC settlements make transparent pricing an option, and Cigna has told investors its legacy rebate models will remain available after 2028.
| “The big three are distorting the market by telling employers pass-through is optional. It isn’t, and employers who buy that are taking on risk they don’t know they have. This rule should put the numbers in front of them before that risk comes due.” — Joseph Shields, CEO, Transparency Rising |
The rule also reaches a main reason employers don’t switch: advisers with conflicts of interest, and penalties when employers move the drug benefit to an independent PBM. Transparency Rising’s data show such penalties and similar terms affect more than 60 percent of transparent-PBM opportunities.
“Brokers paid by the vendors they recommend shouldn’t decide whether an employer can leave. This rule should put that conflict in plain sight,” Shields said.
Transparency Rising thanks Secretary Sonderling, Dr. Oz, [Assistant Secretary Daniel Aronowitz], the Employee Benefits Security Administration, and the members of Congress and state attorneys general of both parties who supported the rule.